There are two primary measures of housing prices that we track at FREEandCLEAR: the Federal Housing Finance Agency (FHFA) House Price Index, which uses certain nationwide mortgage activity to track home prices and the S&P / Case-Shiller Home Price Index, which tracks home prices in 20 U.S. metropolitan markets. Both indices are reported on a monthly basis and include information for the month that is two months prior to the reporting date.
The FHFA House Price Index for December 2014 showed that October housing prices increased 0.6% as compared to September and increased 4.5% on a year-over-year basis (so as compared to October 2013). The FHFA House Price Index for October came in above analyst projections for a 0.2% increase on a month-over-month basis and the annual change increased slightly as compared to the 4.4% annual increase in September. The S&P / Case-Shiller Home Price Index for December 2014 showed that housing prices increased 0.8% in October as compared to September and increased 4.5% on a year-over-year basis, although this represented the smallest year-over-year increase in approximately two years. The S&P / Case-Shiller Home Price Index figures slightly exceeded analyst expectations with the monthly figure improving and the annual figure declining. The strength of both indices comes as somewhat of a surprise given the relative sluggish performance of the national real estate market over the second half of 2014. It is important to highlight that these indices reflect the trend in nationwide housing prices and housing prices for a specific region or city can vary significantly. For example, the S&P / Case-Shiller Home Price Index which tracks individual cities showed significant price increases in Atlanta, Tampa Bay, Denver and San Francisco. (Source: Econoday)
What it Means for Mortgage Borrowers
The latest figures from the FHFA Housing Price Index and S&P / Case-Shiller Home Price Index suggest that housing prices remain relatively strong despite the overall sluggish state of the real estate market. FREEandCLEAR will continue to keep an eye on both indices as rising home prices make home ownership less attainable for prospective home buyers. It is important to highlight that the FHFA Housing Price Index and S&P / Case-Shiller Home Price Index reports present data for October and more recent reports on new and existing home sales suggest that housing prices are steady on a national basis. If you are thinking about buying a home, use the FREEandCLEAR Mortgage Qualification Calculator to determine what size mortgage you can afford and use the INTEREST RATES feature on FREEandCLEAR to review interest rates for lenders in your area.
The FREEandCLEAR Mortgage Expert